a comparative Study Between: The Great Depression (1929-1939) and the Financial Crisis (2007-2010) In the United States of America

Abstract

The Financial Crisis started as the so called the Subprime Mortgages Crisis in the United States at the end of 2007. It gradually spread to all the Financial Markets and ended up reaching the real economy. By the end of 2008, the financial crisis had generated a complete economic crisis, announcing that Capitalist System of the greatest country in the world had entered in financial Great Recession and spread to the other economies around the world. Recent events have reminded us for the Great Depression of 1929. Experts and economists resembled and compared the current situation with the Great Depression of the 1930s, And the policy makers have to understand the roots and the dimension of the crisis in order to prevent the negative effects, and change regulation of the financial sector, the debate is of course a reasonable one to have, they have to make sure that the roots of the Crises are similar. So this research addresses the question: Is the current financial crisis similar to the Great Depression? For that purpose we have compared these crises from the historical perspective and contextual in their setting in order to highlight the differences and similarities between their causes and consequences and we see whether the policy reactions in Financial Crisis are the same as in the Great Depression, or different.